When it comes to understanding the nuances and intricacies of credit reports and debt management, countless consumers face challenges. One very common concern is whether two collection agencies are allowed to show the same debt on your credit report.
This is also sometimes known as double reporting, and we’re going to dig into what exactly double reporting is and how it can happen. Then we’ll look at some steps you can take to resolve the issue, and what to do if that resolution can’t be found through normal channels, like partnering with Fair Credit to take legal action to clear your credit inaccuracies.
When you incur a debt with someone, or default on a previously agreed upon credit or lending agreement, that original creditor or loan servicer may not retain possession of that debt for very long. In many cases, if they cannot collect the debt for a longer period, often around 180 days, they will hire a collection agency to collect that debt or they may have the right to collect that debt from a third party.
If the first collection company fails to collect the debt, it may decide to subsequently sell or reassign the debt again. There is generally no limit to how often this can happen, or how many times. It’s not uncommon for some debt to be sold two, three, or even four times during the time it’s allowed to be displayed on your credit report.
In short, yes, two or more collection agencies can show the same debt on your credit report. However, while possible, this shouldn’t happen under most normal circumstances. Collection agencies are required to report accurate information to credit bureaus, which means that once a debt is sold or transferred the agency transferring the debt should remove their entry from your credit report and refrain from any further reporting of the debt.
Unfortunately, some errors happen for a range of different reasons, and this means you may notice that two or more collection agencies are listing the same debt on your credit report. This is a considerable problem because it counts as double reporting, which can have a significant negative impact on your overall credit rating by creating an inaccurate representation of your consumer debt.
Some of the effects that double reporting can have on your credit report and various credit score calculations are serious. If the debt is larger, it can dramatically change the total amount of debt your credit report shows, which has a trickle-down effect.
Your credit utilization ratio shifts negatively, your debt-to-income ratio changes, and you appear to incur multiple similar debts. This can mean unfavorable terms and rates, or even denials for loans or similar products.
If you think you may have two collection agencies showing the same debt on your credit report, follow these steps to verify the errors and fight back:
You can request a free copy of your credit reports from all three of the major bureaus, Equifax, TransUnion, and Experian, once every 12 months through AnnualCreditReport.com, or monitor continuously through an app like CreditKarma.
Once you have your reports you’ll need to go through them with a fine-toothed comb. Look for any duplications, inaccuracies, typos, or other errors, and make a note of each. Remember that most debt can only stay on your credit report for 7 years, with a few exceptions.
Reach out to each of the collection agencies that are reporting the duplicate debts, and request that they correct the information that is being reported to the credit bureaus. Be sure you keep copies of all communications and correspondence, in case you end up needing to pursue legal action against them for slander of credit or similar issues.
After you’ve contacted the collection agencies reporting the duplicate debts, and if they were not able to provide immediate resolution for the issues, it’s time to dispute the inaccuracies directly with the credit bureaus. Each inaccuracy must be disputed with the bureau whose report it’s on, and you’ll need to provide sufficient evidence to support your position and overall case. The evidence needed may include things like identification documentation, account statements, loan agreements, payment history records, and more. Once you file the dispute with the bureau, they will have 30 days to investigate the matter, after which they will either need to correct or remove the credit report item.
Continue to monitor your credit reports often, for several reasons. First, you’ll need to keep an eye on your credit reports to ensure the inaccuracies are corrected and that your credit reports are restored to their original, correct state. Secondly, it gives you the chance to go over your credit reports at least once per month, and more often in some cases, to check for any new damage or inaccuracies.
If you notice two collection agencies showing the same debt on your credit report, the easiest and quickest way to get a resolution is by following the steps we’ve laid out here. However, there are times when despite your best efforts and seamless persistence, going through conventional channels simply doesn’t get things done. In cases like this, you may need to turn to legal action to get your credit history back in order.
In times like this, you can trust Fair Credit to be your partner in finding legal solutions to clean up inaccuracies in your credit report. This can be particularly helpful in cases that may progress in seriousness, sometimes even meeting the requirements for allegations of slander of credit.
Reach out to Fair Credit today, and find out more about how we can help you bring action against those who are causing damage to your credit by not maintaining accurate and complete records.